The MSRB solicits applications from qualified candidates to serve on its Board of Directors. The MSRB Board of Directors includes eight members who are representative of the public and seven members who are representatives of MSRB-regulated broker-dealers, banks and municipal advisors. All Board members must be knowledgeable about the municipal market. Any interested individual with knowledge of the municipal securities market may apply to serve on the Board. Rule A-3, “Board Membership: Composition, Elections, Removal, Compensation,” discusses the nomination and election process, including provisions about eligibility and membership requirements. Board members receive an annual stipend of $65,000 for their service.
- MSRB Podcast - Building the Board: Learn about the MSRB’s work to recruit a new class of Board members and create a Board that is diverse, inclusive and representative.
- Board Application Process Infographic: Learn More about applying to the MSRB Board, including selection criteria and steps in the process.
Each year the Board of Directors’ Nominating Committee publicly announces the solicitation of applicants for vacant positions on the Board that begin for the upcoming fiscal year that starts on October 1 (read the press release). Interested individuals are required to complete the online application form on the MSRB Board of Directors Application Portal. Instructions for the application process are available here.
Once applications are submitted, MSRB staff conducts an initial review to confirm each applicant’s category as a public or regulated representative and ensure that all necessary information has been provided in the application. Read the FAQs below for additional information on Board membership categories and eligibility.
The Board’s Nominating Committee then reviews all applications and selects candidates for interviews. Additional documentation, including the Board Member Candidate Questionnaire and consent to a background check are required for applicants who are interviewed. After completion of the interview process, the Nominating Committee nominates selected candidates to the full Board of Directors for election and the nominating process is concluded by September 30. Upon completion of the process, the new Board members are publicly announced, and the names of all applicants are published on the MSRB’s website.
If you have questions about MSRB Board membership or the nominating process, you may contact MSRB staff at BoardApplication@msrb.org or 202-838-1341.
FAQs on MSRB Board Membership Categories and Eligibility
Why Are There Different Membership Categories?
The MSRB was created by Congress in 1975, through amendments to the Securities Exchange Act of 1934. Congress set several specific requirements for the structure and composition of the MSRB Board of Directors—requirements that were substantially revised by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Board membership categories required by the Exchange Act and MSRB Rule A-3 ensure representation of the diverse perspectives of the many constituencies with an interest in the MSRB’s mission and decisions. These include investors and municipal securities issuers, which the MSRB is mandated to protect; dealers in municipal securities and municipal advisors, over which the MSRB has regulatory authority; and members of the public with knowledge of or experience in the municipal industry.
What Are the Different Membership Categories?
Under the Securities Exchange Act of 1934 and MSRB rules, the Board consists of 15 members who all are required to be “knowledgeable of matters related to the municipal securities market.” The Board has two broad categories of members: “public representatives” and “regulated representatives.” A majority of the Board must be “public representatives.” Eight of the Board members are public representatives, required to be “independent of any municipal securities broker, municipal securities dealer, or municipal advisor.” By statute and MSRB rule, the public membership must include at least one person who is representative of institutional or retail investors, at least one person representative of municipal entities, and at least one member of the public with knowledge of or experience in the municipal industry.
Seven Board members will be regulated representatives, meaning they are associated with a dealer or municipal advisor. By statute and MSRB rule, the regulated members must include at least one person associated with a dealer that is not a bank (i.e., a securities firm), at least one person associated with a dealer that is a bank, and at least two associated with non-dealer municipal advisors (i.e., municipal advisors that are not associated with a broker, dealer or municipal securities dealer).
The categories and sub-categories of Board members are:
|Institutional or Retail Investor||Dealer - Non-Bank (Securities Firm)|
|Municipal Entity||Dealer - Bank|
|General||Non-Dealer Municipal Advisor|
How Is a “Public Representative” Defined?
A public representative must be independent of any municipal securities broker, municipal securities dealer, or municipal advisor. Congress directed the MSRB to set requirements by rule regarding the independence of its public representatives. Accordingly, MSRB Rule A-3 defines independent to mean that the individual has “no material business relationship” with any of these MSRB-regulated entities. MSRB Rule A-3 further provides that, to have “no material business relationship”, at a minimum, the person:
- is not associated, and has not been associated within the last five years as of the start of the Board term, with a regulated entity;
- and does not have a relationship with any regulated entity, whether compensatory or otherwise, that reasonably could affect the person’s independent judgment or decision making.
What Does It Mean to Be “Associated with” a Regulated Entity?
The standard to be “associated with” an entity under the Exchange Act is generally expansive in scope. It typically covers most employees of the entity in question, but the standard goes beyond that typical situation. Under the Exchange Act and MSRB Rule A-3, a person also is associated with an entity if the person controls the entity, is controlled by the entity, or the person and the entity are subject to common control. This makes it essential, in analyzing eligibility to be a public MSRB Board member, to consider not only the nature of a potential candidate’s employer, but also all its parent, subsidiary and other affiliated companies.
What Are Examples of "Public Representative" Ineligibility?
In the past, potential candidates have been ineligible because their employer (such as an investment adviser) had an affiliated broker-dealer that transacts in municipal securities and is therefore an MSRB-regulated entity. This has occurred with many potential candidates who held portfolio management or research roles at “buy-side” firms. Potential candidates similarly have been ineligible where, for example, their employer had a subsidiary company that was a regulated entity.
To be a public representative, even for a person who is not “associated with” a dealer or municipal advisor, the person must not have a business relationship, compensatory or otherwise, with a regulated entity that could reasonably affect or be perceived to affect the person’s independence of judgment or decision making. For example, in the past, some attorneys who applied to be public members on the Board were disqualified because of their, or their law firm’s, client relationships with regulated entities. Similarly, persons who applied to be public members representative of institutional investors have at times been disqualified because of the extent of their or their employer’s business relationships with MSRB-regulated dealers. This can occur, for example, in the case of separately managed account arrangements.
Should I Consider Re-applying in the Future if I Am Not Selected?
The Board’s Nominating Committee each year faces the challenging task of finding individuals to complement the skill sets of the continuing Board members and comply with the detailed requirements of the Exchange Act and MSRB Rule A-3. While seeking the best-possible candidates, the Committee strives to balance considerations such as the size, type and geographical location of the employers and organizations represented by candidates, experiences and skill sets of candidates and the likely needs of the Board in the coming years. It is not uncommon for individuals to be eminently qualified but not selected by the Committee for the reason that an individual with a similar background is already serving on the Board. Board members have applied more than once before being selected. Interested persons are encouraged to apply again in the future if not selected.
Hear What Current and Former Board Members Enjoy About the Role
|MSRB Podcast: Building the Board
Hear from special guest Gary Hall, former Board Chair, as well as current Board members, Caroline Cruise and Seema Mohanty, about the MSRB ’s work to recruit a new class of Board members and create a Board that is diverse, inclusive and representative.
|MSRB Podcast: Investing in Technology for the Future
In the last five minutes on this MSRB podcast on technology, former board members Ronald Dieckman, Jerry Ford and Kemp Lewis reflect upon their time as board members.